India could see doubling of FII flows if western money moves out of China, says Saurabh Mukherjea

A late recovery helped Sensex and Nifty end in the green. Sensex gained nearly 150 points and the Nifty gained over 60 points. Bank stocks saw profit booking and the Nifty bank index ended in the red.

Sensex and Nifty posted gains for the third straight week. In fact, in the last three weeks, markets have gained more than five percent.

Saurabh Mukherjea, Founder of Marcellus Investment believes that India could see a doubling of FII investments if western money moves out of the Chinese stock market.

“There is $3.5 trillion of western money invested in the Chinese stock market and I reckon that some portion of that will move to India. Even if a fifth of that moves to India over the next three years, you are basically looking at a doubling of FII investments in the Indian stock market,” Mukherjea said.

He added, “More than the Fed, the institutional investors, and the pension funds in the US are alarmed at the situation in China. So they are stopping investments in China, and that leaves them with only one relevant place to invest outside the developed world and that one destination is India. So unless India scores its own goal, flows into India from America will pick up in the foreseeable future.”